Corporate crime costs €2.5bn

Mon, Mar 5, 2007, 00:00

Claire Shoesmith

Corporate crime is continuing to weigh on businesses, costing them about €2.5 billion last year.

A survey by consultants RSM Robson Rhodes found that despite losing the same amount of money in 2005, and being advised on how to deal with the problems associated with economic crime, companies are not doing enough to tackle the issue.

Patrick D'Arcy, head of forensic services at RSM Robson Rhodes, said that while it is positive that the figure has not risen, it is bad news that is hasn't fallen either. "Levels of staff training in these issues and general awareness of the problem is still too low," he said.

The survey found that only 43 per cent of company boards have any formal risk management training and that more than 58 per cent of staff were unaware of economic crime issues. This is despite the fact that 38 per cent of companies questioned said that the threat of economic crime was having a greater impact on their business compared with the previous year. Only 71 per cent of companies said they would report their suspicion or discovery of any financial fraud to gardaí.

Mr D'Arcy said one of the main problems in this area was companies' failure to share information. According to the survey, only 33 per cent of firms share information relating to economic crime.

"There is a sort of head in the sand approach," he said. "People don't want to be seen to be the one experiencing any difficulties." As a result, Ireland is substantially behind its counterparts in the UK, which have become very good at pooling information and as a result are making in roads into tackling what can be a very costly issue, he said.

The main issues facing companies are asset misappropriation, securities fraud and credit and debit card fraud. Mr D'Arcy said that while the introduction of chip and pin card transactions is likely to help improve the security of credit and debit card transactions there are still too many cases of payments going through without the cardholder being present. Money laundering and employee collusion is also of concern to employers, according to the survey.

Mr D'Arcy said that simple procedures such as regularly moving staff around departments could significantly help reduce levels of corporate crime. He also said it is important for companies to have some sort of whistle-blowing system in place to allow employees to anonymously express their concerns.